[sheet: Issues Tracker]
Issue No. | Category | Merger Agreement Section | Issue Description | C&H Initial Position | Target Counsel Position (Ridgeway Phelps) | Draft Introduced | Current Status | Resolution Summary | Date Resolved | Responsible C&H Attorney | Priority | Notes / Cross-References
1 | MAE Definition | Article I — Definitions; §1.1 "Material Adverse Effect" | Scope of MAE definition — buyer sought broad definition; target sought extensive carveouts including pandemics, war, changes in law, general economic conditions, industry-wide conditions, and changes in stock price or failure to meet projections | Limit carveouts to pandemics, war, and changes in law only; no industry-wide or general economic carveouts; disproportionate-impact qualifier required for all carveouts | Extensive list of carveouts including general economic conditions, industry-wide conditions, changes in stock price, failure to meet projections, effects of announcement of transaction, pandemics, war, changes in law, cyberattacks, and natural disasters — no disproportionate-impact qualifier | Initial Draft (Dec 1, 2023) | Resolved | Agreed to carveouts for pandemics, war, and changes in law; added general economic conditions and industry-wide conditions carveouts with disproportionate-impact qualifier; excluded stock price and projections as standalone carveouts but included as non-exclusive evidence limitation; announcement effects carved out | 2024-01-15 | Harrison Wexford | High | See C&H Annotated Redline — MAE Definition (Dec 22, 2023); resolved at January 15, 2024 final negotiation session in New York
2 | MAE Definition | Article I — Definitions; §1.1 "Material Adverse Effect" | Cyberattack / data-breach carveout — target sought express carveout for effects of cyberattacks and data breaches from MAE definition | Reject; cyber risk is target-specific and should not be carved out | Include broad carveout for effects of any cyberattack, ransomware event, or data breach | Target Mark-Up (Dec 18, 2023) | Resolved | Compromised: cyberattack carveout included but subject to disproportionate-impact qualifier; carveout does not apply to any cyberattack resulting from target's failure to comply with cybersecurity covenants in the interim period | 2024-01-15 | Tiffany Rosenthal | High | Linked to Issue No. 1; coordinated with IP/tech diligence workstream
3 | Indemnification — Cap | Article IX — Indemnification; §9.2(a) | General indemnification cap as a percentage of deal value ($6,800,000,000) | Cap at 10% of deal value ($680,000,000) | Cap at 20% of deal value ($1,360,000,000) or lower; target initially proposed no cap above escrow for certain fundamental reps | Initial Draft (Dec 1, 2023) | Resolved | Agreed at 15% of deal value = $1,020,000,000; special indemnities for fraud, willful breach, tax indemnities, and certain specified litigation remain uncapped | 2024-01-04 | Harrison Wexford | High | See C&H Annotated Redline — Indemnification and Escrow Provisions (Jan 3, 2024); buyer secured R&W insurance to cover additional exposure above escrow
4 | Indemnification — Escrow | Article IX — Indemnification; §9.3; Exhibit E (Escrow Agreement) | Escrow amount as a percentage of deal value to serve as primary source of indemnification recovery | Escrow of 10% of deal value ($680,000,000) with 18-month hold | Escrow of 5% of deal value ($340,000,000) with 12-month hold and immediate release upon survival expiration | Initial Draft (Dec 1, 2023) | Resolved | Agreed at 8% of deal value = $544,000,000 deposited with Cobalt Trust Company; 50% ($272,000,000) released at 12 months post-closing (July 9, 2025), remainder released at 18 months (January 9, 2026), less pending claims | 2024-01-15 | Harrison Wexford | High | Escrow amount matches R&W insurance retention ($544,000,000); Northfield Assurance policy sits above escrow; see Escrow Agreement (Exhibit E)
5 | Indemnification — Basket/Deductible | Article IX — Indemnification; §9.2(b) | Indemnification basket type (tipping vs. true deductible) and threshold amount | True deductible of 1.0% of deal value ($68,000,000) — buyer retains first-dollar risk up to deductible | Tipping basket of 0.50% of deal value ($34,000,000) — once threshold crossed, buyer recovers from first dollar | Initial Draft (Dec 1, 2023) | Resolved | Agreed on tipping basket (not true deductible) at 0.75% of deal value = $51,000,000; once aggregate claims exceed $51,000,000, buyer recovers from first dollar | 2024-01-04 | Tiffany Rosenthal | Medium | See C&H Annotated Redline — Indemnification and Escrow Provisions (Jan 3, 2024)
6 | Indemnification — De Minimis | Article IX — Indemnification; §9.2(c) | De minimis threshold below which individual claims are excluded from the basket calculation | $750,000 per claim | $250,000 per claim | Initial Draft (Dec 1, 2023) | Resolved | Agreed at $500,000 per claim; individual claims below $500,000 are excluded from the basket | 2024-01-04 | Tiffany Rosenthal | Low | Standard market provision
7 | Indemnification — Survival Period | Article IX — Indemnification; §9.1 | Duration of survival of representations and warranties post-closing | 12 months post-closing | 24 months post-closing; 36 months for fundamental representations | Initial Draft (Dec 1, 2023) | Resolved | Agreed at 18 months post-closing (expiring January 9, 2026) for general representations; fundamental representations survive until 60 days after applicable statute of limitations; tax representations survive until 60 days after applicable statute of limitations | 2024-01-15 | Harrison Wexford | High | Coordinated with R&W insurance policy terms — Northfield Assurance policy covers same survival period; 50% retention drops to $272,000,000 after 12 months if no pending claims
8 | Termination Fee | Article VIII — Termination; §8.3(a) | Termination fee payable by Cloudium in the event of a board recommendation change, superior proposal, or failure to obtain stockholder approval | 3.5% of deal value = $238,000,000 | 2.5% of deal value = $170,000,000 | Initial Draft (Dec 1, 2023) | Resolved | Agreed at 3.25% of deal value = $221,000,000; payable upon termination for board recommendation change, entry into a superior proposal, or failure to hold stockholder meeting within required timeframe | 2024-01-15 | Harrison Wexford | High | See Memorandum — Termination Fee and Reverse Termination Fee Analysis (Jan 6, 2024); benchmarked against recent large-cap software take-private transactions
9 | Reverse Termination Fee | Article VIII — Termination; §8.3(b) | Reverse termination fee payable by Solara / Fund VI in the event of a financing failure or buyer breach leading to failure to close | 4.5% of deal value = $306,000,000 | 6.0% of deal value = $408,000,000; target also sought specific performance for equity commitment | Initial Draft (Dec 1, 2023) | Resolved | Agreed at 5.5% of deal value = $374,000,000; target's sole monetary remedy for financing failure (no specific performance of equity commitment); Limited Guarantee from Solara Fund VI GP LLC covers $221,000,000 (termination fee amount) + $25,000,000 enforcement costs = $246,000,000 | 2024-01-15 | Harrison Wexford | High | See Memorandum — Termination Fee and Reverse Termination Fee Analysis (Jan 6, 2024); Limited Guarantee — Execution Version (Jan 22, 2024)
10 | No-Shop / Go-Shop | Article VI — Covenants; §6.4 | Whether merger agreement includes a no-shop from signing or a go-shop period allowing target to solicit competing bids post-signing | Strict no-shop from signing; no go-shop period; limited fiduciary-out exception for unsolicited superior proposals | 30-day go-shop period post-signing to test market; standard fiduciary-out | Initial Draft (Dec 1, 2023) | Resolved | No-shop effective from signing (January 22, 2024); no go-shop period; fiduciary-out exception permitting board to consider and respond to bona fide unsolicited superior proposals received after signing, subject to matching rights (4 business days for initial match; 3 business days for subsequent match) and payment of termination fee | 2024-01-04 | Harrison Wexford | High | See C&H Annotated Redline — No-Shop and Fiduciary-Out Provisions (Dec 28, 2023); buyer leveraged exclusivity agreement (Nov 15, 2023) as precedent for no go-shop
11 | Matching Rights | Article VI — Covenants; §6.4(d) | Number of business days and iterations of matching right before board may terminate for superior proposal | 5 business days initial match; 3 business days for subsequent amendments; unlimited match iterations | 3 business days initial; 2 business days subsequent; limited to 2 total match rounds | Target Mark-Up (Dec 18, 2023) | Resolved | Agreed: 4 business days for initial match; 3 business days for each subsequent amendment to competing proposal; no limit on match iterations | 2024-01-15 | Tiffany Rosenthal | Medium | Linked to Issue No. 10
12 | Representations — Fundamental Reps Scope | Article IV — Representations and Warranties of the Company; §§4.1–4.4 | Which seller representations qualify as 'fundamental' (longer survival, outside basket, potentially uncapped) | Only organization/existence, authorization, capitalization, and subsidiaries | Add brokers/finders, no conflict, and tax representations to fundamental reps list | Initial Draft (Dec 1, 2023) | Resolved | Fundamental representations include: organization and existence (§4.1), authorization (§4.2), capitalization (§4.3), subsidiaries (§4.4), and brokers/finders (§4.24); tax representations have separate extended survival but remain subject to general cap; no-conflict is not a fundamental rep | 2024-01-04 | Tiffany Rosenthal | Medium | Cross-reference Article IX survival provisions
13 | Representations — IP / Technology | Article IV — Representations and Warranties of the Company; §4.12 | Scope and specificity of intellectual property and technology representations including open-source compliance, source-code escrow, and data privacy | Comprehensive IP reps covering ownership, non-infringement, open-source license compliance (copyleft obligations), source-code escrow arrangements, data privacy / GDPR / CCPA compliance, and absence of material cybersecurity incidents in prior 3 years | Narrower IP reps limited to knowledge-qualified non-infringement; no specific open-source schedule; limited cybersecurity rep to last 12 months | Initial Draft (Dec 1, 2023) | Resolved | Broad IP representations agreed, including: (i) ownership free and clear of encumbrances; (ii) non-infringement qualified by knowledge for third-party IP claims; (iii) open-source compliance with schedule of material open-source components; (iv) data privacy / GDPR / CCPA compliance; (v) no material cybersecurity incident in prior 24 months (compromise from 36 / 12 months); source-code escrow arrangements disclosed in disclosure schedule | 2024-01-15 | Andrew Fitzpatrick | High | Coordinated with IP/tech diligence (Supplemental DD Request — IP and Technology, Oct 8, 2023); key consideration for R&W insurance underwriting with Northfield Assurance
14 | Representations — Government Contracts | Article IV — Representations and Warranties of the Company; §4.18 | Representations regarding government contracts, FedRAMP authorization, and compliance with applicable regulations | Specific representation regarding FedRAMP status, ITAR/EAR compliance, and material government customer contracts including Aegis Federal Solutions Inc. ($84M ARR) | General compliance representation only; no contract-specific disclosures in body of agreement (schedule reference only) | Second Revised Draft (Jan 4, 2024) | Resolved | Agreed to specific government contracts representation including schedule listing all government contracts exceeding $5M ARR; FedRAMP authorization status disclosed; ITAR/EAR compliance confirmed; Aegis Federal Solutions Inc. consent requirement specifically identified and tracked | 2024-01-15 | Andrew Fitzpatrick | High | Coordinated with Supplemental DD Request — Regulatory and Government Contracts (Oct 15, 2023); Aegis Federal consent is a closing condition
15 | Change of Control Provisions | Article IV — §4.5 (Material Contracts); Article VII — §7.2(f) (Closing Conditions) | Treatment of material contracts containing change of control provisions; whether consent is a closing condition or post-closing covenant | Consents under Aegis Federal Solutions Inc. Master SaaS Agreement and Helix Data Systems GmbH Technology License Agreement required as conditions to closing; other change of control consents to be obtained on commercially reasonable efforts basis | No individual contract consent as a hard closing condition; all consents on reasonable best efforts basis only | Initial Draft (Dec 1, 2023) | Resolved | Aegis Federal Solutions Inc. consent and Helix Data Systems GmbH consent are each a condition to buyer's obligation to close (§7.2(f)); existing Atlas Commercial Lending Corp. credit agreement ($820M payoff) handled via mandatory prepayment at closing; all other change of control consents subject to commercially reasonable efforts covenant | 2024-01-17 | Tiffany Rosenthal | High | See Issue-Specific Diligence Memo — Change-of-Control Provisions (Jan 8, 2024); Atlas payoff confirmed via payoff letter process
16 | Interim Operating Covenants | Article VI — Covenants; §6.1 | Scope of operating restrictions on Cloudium between signing and closing — ordinary course obligation, capital expenditure limits, hiring restrictions, dividend restrictions | Strict ordinary-course covenant with comprehensive negative covenants; buyer consent required for any action outside ordinary course; capex limit of $40M per quarter; no new hires above $300,000 annual base compensation without consent | Broader ordinary-course flexibility; capex limit of $75M per quarter; new hires below VP level without consent; carveout for actions required by COVID/pandemic response | Initial Draft (Dec 1, 2023) | Resolved | Ordinary course of business consistent with past practice; capex limit of $50M per quarter; new hires above $250,000 annual base require buyer consent; express carveout for actions required by applicable law or regulation; pandemic-response carveout removed (covered by general law-compliance exception); $12M hosting agreement waiver subsequently granted (April 29, 2024) | 2024-01-15 | Tiffany Rosenthal | Medium | See Memorandum — Interim Operating Covenants Review (Jan 12, 2024); Letter Agreement — Waiver of Certain Pre-Closing Covenants (Apr 29, 2024)
17 | Financing Cooperation Covenant | Article VI — Covenants; §6.14 | Scope of target's obligation to cooperate with buyer's debt financing; extent of assistance, representations, and officer involvement required | Comprehensive cooperation covenant requiring target to: provide audited/unaudited financials, participate in lender presentations and road shows, cause officers to execute customary certificates and authorization documents, provide rating agency presentations, and use reasonable best efforts to obtain payoff letters for existing indebtedness | Limited cooperation; no officer involvement in syndication road shows; cooperation conditioned on buyer's indemnification of target for all costs and expenses; no obligation to take any action that would conflict with existing credit agreement | Initial Draft (Dec 1, 2023) | Resolved | Target to provide reasonable cooperation including: (i) financial information and audited financials in SEC-compliant form; (ii) participation in one lender presentation; (iii) cause CFO (Sienna Whitfield) to deliver solvency certificate at closing; (iv) facilitate rating agency calls; (v) use commercially reasonable efforts to obtain payoff letters from Atlas Commercial Lending Corp.; buyer to reimburse target's reasonable out-of-pocket costs; target not required to take action that would conflict with existing credit agreement or create personal liability for officers/directors | 2024-01-04 | Tiffany Rosenthal | High | See C&H Memorandum — Financing Cooperation Covenant Review (Feb 5, 2024); Solvency Certificate form prepared by C&H
18 | Rollover Equity — Structure | Article II — The Merger; §2.3; Exhibits F and G (Rollover Agreements) | Structure and tax treatment of rollover equity for Jonathan Hargrove (CEO, 4.2% holder) and Pinnacle Growth Ventures LLC (11.6% holder) | Direct rollover into surviving entity equity; Section 368(a)(2)(E) tax-free exchange for qualifying rollover participants; voting agreements required concurrently | Rollover structured as contribution to new holdco; broader flexibility for rollover percentages; no mandatory voting agreement | Initial Draft (Dec 1, 2023) | Resolved | Rollover into surviving entity: Hargrove rolls 50% of 7,736,400 shares (~$142,814,544); Pinnacle rolls 60% of 21,367,200 shares (~$473,241,408); total rollover ~$616,055,952; each executes Rollover Agreement and Voting/Support Agreement concurrently with Merger Agreement signing; Section 368(a)(2)(E) analysis confirmed by Leonard Cross (Tax) | 2024-01-15 | Harrison Wexford | High | See Tax Structuring Memorandum — Section 368 Analysis (Nov 1, 2023); Rollover Agreements (Exhibits F, G); Voting/Support Agreements (Exhibit H)
19 | Non-Competition Agreements | Ancillary — Non-Competition and Non-Solicitation Agreements | Scope, duration, and geographic restrictions of non-compete and non-solicitation agreements for Cloudium CEO (Jonathan Hargrove) and CFO (Sienna Whitfield) | 3-year non-compete and non-solicitation (employees and customers); worldwide scope; both CEO and CFO | 18-month non-compete; US/UK only; no customer non-solicitation; CEO only (CFO not a party) | Initial Draft (Dec 1, 2023) | Resolved | Agreed: 2-year non-compete (worldwide for cloud ERP, CRM, and BI software); 2-year non-solicitation of employees and customers; both Hargrove and Whitfield sign separate agreements; standard carveouts for passive investments below 5% | 2024-01-17 | Andrew Fitzpatrick | Medium | Non-Competition Agreements executed January 22, 2024
20 | Stockholder Representative | Article IX — Indemnification; §9.7; Stockholder Representative Agreement | Appointment and authority of stockholder representative to act on behalf of former stockholders for indemnification claims, escrow releases, and purchase price adjustments | Buyer-designated representative or institutional representative service | Target board chair Douglas Pemberton as stockholder representative; broad authority; indemnification of representative by former stockholders | Target Mark-Up (Dec 18, 2023) | Resolved | Douglas Pemberton (independent board chair) appointed as Stockholder Representative; authority over indemnification claims, escrow releases, and purchase price adjustments; representative indemnified and held harmless by former stockholders from representative reserve fund ($2,000,000 set aside from merger consideration) | 2024-01-04 | Tiffany Rosenthal | Medium | See Stockholder Representative Agreement — Execution Version (Jan 22, 2024)
21 | R&W Insurance Interplay | Article IX — Indemnification; §9.5 | Mechanics for integrating buyer-side R&W insurance with contractual indemnification and escrow; subrogation rights; effect on seller's exposure | R&W insurance is supplemental; buyer's first recourse is escrow and direct indemnification (up to cap); R&WI covers amounts above retention ($544M = escrow); no reduction of seller's contractual obligations | R&WI should replace direct indemnification above escrow; seller's liability capped at escrow only ($544M); full waiver of subrogation against seller | Second Revised Draft (Jan 4, 2024) | Resolved | Buyer's first recourse is escrow (and direct indemnification from rollover participants up to 15% cap = $1,020,000,000); R&WI from Northfield Assurance ($680M limit, Policy No. NFA-TRI-2024-00487) covers amounts above the $544M retention; seller's contractual cap remains at 15%; subrogation waived against Cloudium and its officers/directors except in cases of fraud | 2024-01-17 | Harrison Wexford | High | See C&H Memorandum — R&W Insurance Coverage Analysis (Jan 18, 2024); R&W Policy Exclusions and Gap Analysis (Jan 20, 2024)
22 | Specific Performance | Article X — Miscellaneous; §10.12 | Availability of specific performance to enforce pre-closing covenants and obligation to close | Mutual specific performance for pre-closing covenants; buyer entitled to specific performance to force closing only where debt financing is available and all conditions satisfied | Target entitled to specific performance to force buyer to close under all circumstances where conditions are met (regardless of financing availability); mutual for pre-closing covenants | Initial Draft (Dec 1, 2023) | Resolved | Mutual specific performance for pre-closing covenants; target entitled to specific performance to force closing only where (i) all conditions to buyer's closing obligation satisfied, (ii) debt financing has been funded or would be funded at closing if equity contribution is made, and (iii) target has confirmed readiness to close; in all other cases, reverse termination fee ($374M) is target's sole monetary remedy | 2024-01-15 | Harrison Wexford | High | Linked to Issue Nos. 9 and 17
23 | Conditions to Closing — Regulatory Approvals | Article VII — Conditions to Closing; §7.1(b) | Which regulatory approvals are conditions to mutual closing obligation | HSR Act clearance, UK CMA clearance, and absence of any governmental order prohibiting the merger | Same; target also wanted CFIUS clearance as a condition | Initial Draft (Dec 1, 2023) | Resolved | Mutual closing conditions include: (i) expiration or termination of HSR Act waiting period; (ii) UK CMA Phase 1 or Phase 2 clearance; (iii) absence of any governmental order or injunction prohibiting the merger; CFIUS not included as a condition (voluntary notice not filed per C&H assessment — no TID U.S. business); no EU filing required (below EU Merger Regulation thresholds) | 2024-01-04 | Elaine Forsythe | High | See C&H Memorandum — CFIUS Voluntary Notice Assessment (Nov 30, 2023); EU Merger Regulation Analysis (Dec 3, 2023); HSR filing made Feb 9, 2024; CMA filing Feb 12, 2024
24 | Conditions to Closing — Stockholder Approval | Article VII — Conditions to Closing; §7.1(a) | Stockholder approval threshold and special meeting mechanics | Simple majority of shares outstanding; meeting to be held within 45 days of proxy clearance | Simple majority of shares voted (not outstanding); meeting within 60 days | Initial Draft (Dec 1, 2023) | Resolved | Approval by holders of a majority of the outstanding shares of Cloudium common stock entitled to vote; special meeting to be held within 50 days of date on which definitive proxy statement is first mailed to stockholders; Blackthorn Proxy Advisors LLC retained to solicit votes | 2024-01-04 | Tiffany Rosenthal | Medium | Proxy statement filed April 15, 2024; special meeting held May 20, 2024 — 82.4% voted in favor
25 | Outside Date / Drop-Dead Date | Article VIII — Termination; §8.1(b) | Outside date by which closing must occur or either party may terminate the Merger Agreement | 6 months from signing (July 22, 2024) | 9 months from signing (October 22, 2024) with automatic 3-month extension for regulatory delays | Initial Draft (Dec 1, 2023) | Resolved | Outside date: June 30, 2024 (approximately 5 months and 8 days from signing); automatic extension to September 30, 2024 if all conditions satisfied except regulatory approvals; no further extension beyond September 30, 2024; actual closing occurred July 9, 2024 (9 days past initial outside date, within extension) | 2024-01-15 | Harrison Wexford | High | Closing occurred July 9, 2024 after final regulatory condition confirmed July 2, 2024; parties agreed to close on July 9
26 | Governing Law / Dispute Resolution | Article X — Miscellaneous; §10.9 | Governing law of the Merger Agreement and forum for disputes | Delaware law; exclusive jurisdiction in the Delaware Court of Chancery (or if unavailable, the federal courts of the District of Delaware) | English law for certain provisions relating to Cloudium as a UK company; arbitration for disputes above a threshold amount | Initial Draft (Dec 1, 2023) | Resolved | Merger Agreement governed by Delaware law; exclusive forum in the Delaware Court of Chancery (or if Chancery declines jurisdiction, the Superior Court of the State of Delaware, or if neither accepts jurisdiction, the U.S. District Court for the District of Delaware); JURY TRIAL WAIVER by all parties | 2024-01-04 | Tiffany Rosenthal | Medium | Standard for DGCL reverse triangular merger; no English law carveout
27 | Employee Matters — Post-Closing | Article VI — Covenants; §6.8 | Treatment of Cloudium employees post-closing: benefit continuation, severance, equity award acceleration, service credit, and UK pension obligations | Continuation of comparable benefits for 12 months post-closing; assumption and conversion of outstanding equity awards; no enhanced severance commitments | Continuation of equivalent benefits for 24 months; double-trigger acceleration for all equity awards; enhanced change-of-control severance for all employees above director level; full service credit | Initial Draft (Dec 1, 2023) | Resolved | Continuation of comparable aggregate compensation and benefits for 12 months post-closing; outstanding equity awards cancelled and converted to cash at merger consideration; double-trigger acceleration for C-suite officers only (Hargrove, Whitfield, Chowdhury); standard service credit for purposes of eligibility and vesting; UK pension obligations (Cloudium Technologies UK Ltd., ~1,200 employees) continue without reduction; India gratuity/PF obligations of Cloudium Technologies India Pvt. Ltd. (~2,400 employees) continue per applicable law | 2024-01-17 | Andrew Fitzpatrick | Medium | See Supplemental DD Request — Employee Benefits and Compensation (Oct 22, 2023); Issue-Specific Diligence Memo — UK Employment and TUPE (Jan 10, 2024)
28 | Appraisal / Dissent Rights | Article II — The Merger; §2.5 | Mechanics and disclosure of stockholder appraisal rights under DGCL § 262 | Standard DGCL § 262 appraisal rights disclosure; no provision for withdrawal deadline beyond statutory default | Request for extended withdrawal period and enhanced disclosure in proxy statement | Target Mark-Up (Dec 18, 2023) | Resolved | Standard DGCL § 262 mechanics; appraisal rights notice prepared by C&H for distribution within 10 days of closing; dissenting shares not entitled to merger consideration unless appraisal demand properly withdrawn or judicially determined; proxy statement includes Section 262 requirements in full | 2024-01-04 | Tiffany Rosenthal | Low | See C&H Memorandum — Appraisal Rights under DGCL § 262 (Jan 2, 2024)
29 | Purchase Price Adjustment / Working Capital | Article II — The Merger; §2.7 | Post-closing purchase price adjustment based on working capital, cash, and indebtedness at closing | Customary working-capital adjustment with target working capital peg; buyer-prepared closing statement; 60-day review period; dispute resolution via independent accounting firm | No working-capital adjustment (locked-box mechanism with interest accruing from locked-box date); target-prepared closing statement only | Initial Draft (Dec 1, 2023) | Resolved | Customary purchase price adjustment: target delivers estimated closing statement 3 business days before closing; buyer has 90 days post-closing to deliver objection statement; disputes resolved by independent accounting firm (to be mutually agreed; costs split based on relative success); target working capital peg based on trailing 12-month average; no locked-box mechanism | 2024-01-15 | Tiffany Rosenthal | Medium | See Post-Closing Purchase Price Adjustment Memorandum (Aug 1, 2024) for implementation details; Estimated Closing Statement delivered July 8, 2024
30 | Transition Services Agreement | Article VI — Covenants; §6.16; Exhibit (TSA Form) | Scope and duration of transition services to be provided post-closing | 6-month TSA covering IT, finance/accounting, HR, and facilities; cost-plus basis; no obligation to hire target employees to provide services | 12-month TSA; at-cost basis; include customer success and support functions; option to extend for additional 6 months | Second Revised Draft (Jan 4, 2024) | Resolved | TSA covering IT infrastructure, finance/accounting, HR administration, and facilities for up to 9 months post-closing; at cost plus 5% markup; option to extend for 3 additional months at cost plus 10%; customer-facing functions excluded from TSA | 2024-01-17 | Andrew Fitzpatrick | Low | See Transition Services Agreement — Form (Jan 22, 2024)
31 | Knowledge Qualifier — Definition | Article I — Definitions; §1.1 "Knowledge" | Definition of 'knowledge' for purposes of knowledge-qualified representations — actual knowledge vs. constructive knowledge; named individuals | Constructive knowledge (actual knowledge plus knowledge that would be obtained after reasonable inquiry) of CEO, CFO, General Counsel, CTO, and VP of Compliance | Actual knowledge only; limited to CEO, CFO, and General Counsel | Initial Draft (Dec 1, 2023) | Resolved | Actual knowledge of Jonathan Hargrove (CEO), Sienna Whitfield (CFO), Nadia Chowdhury (General Counsel), plus constructive knowledge (after reasonable inquiry of direct reports) of same individuals; no inclusion of CTO or VP of Compliance in knowledge group | 2024-01-04 | Tiffany Rosenthal | Medium | Compromise: actual knowledge base with limited constructive knowledge overlay
32 | Debt Financing — Conditions / SunGard Certainty | Article VII — Conditions to Closing; §7.2(g); Debt Commitment Letter | Whether buyer's obligation to close is conditioned on obtaining debt financing; SunGard-style conditionality (no financing condition but limited remedies) | No financing condition; buyer obligated to close regardless of financing availability; reverse termination fee as sole remedy for financing failure | Target insisted on no financing condition and full specific performance for equity commitment if financing available | Initial Draft (Dec 1, 2023) | Resolved | No financing condition — buyer's obligation to close is not conditioned on receipt of debt financing; debt commitment letter conditions limited to SunGard-style 'certain funds' conditions (accuracy of specified reps, no MAE, and funding mechanics); reverse termination fee ($374M) as sole monetary remedy if financing fails and specific performance not available per §10.12 | 2024-01-04 | Harrison Wexford | High | See C&H Memorandum — Debt Commitment Letter Review and Commentary (Dec 15, 2023); Debt Commitment Letter — Execution Version (Jan 22, 2024)
33 | Ticking Fee Commencement | Debt Commitment Letter; Side Letter | When ticking fee on undrawn Term Loan B commitments begins to accrue | 120 days post-signing | N/A — negotiated with lenders directly (Meridian Atlantic / Ironclad); target not a direct party but relevant to timing pressure on closing | DCL Draft (Dec 10, 2023) | Resolved | Ticking fee of 0.25% per annum on undrawn Term Loan B commitments ($3,740,000,000) commencing 90 days after signing (April 22, 2024); revolver commitment fee of 0.375% per annum on undrawn commitments from signing | 2024-01-22 | Tiffany Rosenthal | Medium | Negotiated with Meridian Atlantic Bank (Graham Whitaker) and Ironclad Capital Markets (Samuel Diaz); see Fee Letter
34 | Representations — Sufficiency of Assets | Article IV — Representations and Warranties of the Company; §4.21 | Representation that target's assets are sufficient to conduct the business as currently conducted | Full sufficiency-of-assets representation without qualification | Knowledge-qualified; exclude shared-services and corporate overhead assets that may not transfer in a carve-out (N/A here but target's counsel raised as standard objection) | Target Mark-Up (Dec 18, 2023) | Resolved | Unqualified sufficiency-of-assets representation (target is being acquired in its entirety, not a carve-out); no knowledge qualifier | 2024-01-04 | Andrew Fitzpatrick | Low
35 | Representations — Financial Statements / No Undisclosed Liabilities | Article IV — §4.6 (Financial Statements); §4.7 (No Undisclosed Liabilities) | Scope of financial statement representation and materiality threshold for undisclosed liabilities | Financial statements prepared in accordance with IFRS (Cloudium is a UK plc) and US GAAP reconciliation; no undisclosed liabilities exceeding $5,000,000 individually or $15,000,000 in the aggregate | IFRS only (no US GAAP reconciliation in rep); undisclosed liabilities threshold of $10,000,000 individually / $25,000,000 aggregate | Initial Draft (Dec 1, 2023) | Resolved | Financial statements represented as prepared in accordance with IFRS with US GAAP reconciliation (as filed with SEC); audited by Harwell & Dobson LLP (Martin Chisholm, engagement partner); no undisclosed liabilities exceeding $7,500,000 individually or $20,000,000 in the aggregate, except as disclosed in disclosure schedules | 2024-01-04 | Andrew Fitzpatrick | Medium | LTM Revenue $1,620,000,000; LTM EBITDA $405,000,000; ARR $1,740,000,000 (as of Dec 31, 2023)
36 | Anti-Sandbagging | Article IX — Indemnification; §9.6 | Whether buyer's knowledge of a breach prior to closing affects its right to indemnification post-closing (pro-sandbagging vs. anti-sandbagging) | Pro-sandbagging: buyer's right to indemnification is not affected by any knowledge of breach obtained before or after closing | Anti-sandbagging: buyer's recovery limited to breaches of which buyer did not have actual knowledge prior to closing | Target Mark-Up (Dec 18, 2023) | Resolved | Pro-sandbagging clause: buyer's right to indemnification shall not be limited or affected by any knowledge obtained by buyer or its representatives at any time, whether before or after closing; subject to R&W insurance known-loss exclusion (standard) | 2024-01-15 | Harrison Wexford | High | Critical for R&W insurance coverage — Northfield Assurance known-loss exclusion is separate contractual concept from merger agreement sandbagging
37 | Exclusivity of Remedies | Article IX — Indemnification; §9.8 | Whether indemnification under Article IX is the exclusive post-closing remedy (except for fraud and specific performance) | Exclusive remedy for all claims arising out of or relating to the Merger Agreement, except fraud, willful breach, specific performance, and equitable relief | Non-exclusive; preserve common-law fraud claims and contractual claims outside the Merger Agreement | Initial Draft (Dec 1, 2023) | Resolved | Indemnification under Article IX is the exclusive post-closing remedy for any breach of representations, warranties, or covenants; preserves claims for fraud, intentional misrepresentation, willful breach, and equitable relief (including specific performance); does not limit remedies under ancillary agreements (Rollover Agreements, Escrow Agreement, Non-Competes) | 2024-01-04 | Tiffany Rosenthal | Medium
38 | Efforts Standard — Regulatory Approvals | Article VI — Covenants; §6.5 | Level of efforts required of buyer to obtain regulatory approvals (HSR, CMA); whether buyer must offer divestitures or accept conditions | Reasonable best efforts to obtain approvals; no obligation to divest assets, accept behavioral remedies, or litigate with regulators | Hell-or-high-water: buyer must take any and all actions necessary to obtain approvals including divestitures and behavioral commitments | Initial Draft (Dec 1, 2023) | Resolved | Buyer to use reasonable best efforts to obtain all regulatory approvals; buyer shall not be required to divest or hold separate any assets generating more than $150,000,000 in annual revenue or accept behavioral remedies that would materially impair the expected benefits of the transaction; buyer must cooperate with and not withdraw any regulatory filings without target's consent | 2024-01-15 | Elaine Forsythe | High | HSR clearance obtained March 11, 2024 (no Second Request); CMA Phase 1 unconditional clearance April 3, 2024; no divestiture required
39 | Closing Mechanics — Effective Time | Article II — The Merger; §2.1 | Timing and mechanics of the effective time of the merger | Effective time upon filing of Certificate of Merger with Delaware Secretary of State at time specified in Certificate; target to be surviving corporation | Agreed in principle; dispute only on whether effective time is 12:01 AM or 11:59 PM on closing date | Third Revised Draft (Jan 17, 2024) | Resolved | Effective time: 11:59 PM ET on the closing date upon filing of Certificate of Merger with the Delaware Secretary of State; Cloudium Technologies plc survives as a wholly owned subsidiary of Solara Digital Infrastructure Fund VI LP; Stratos Merger Sub Inc. ceases to exist | 2024-01-17 | Tiffany Rosenthal | Low | Certificate of Merger filed at 11:59 PM ET on July 9, 2024
40 | D&O Tail Insurance | Article VI — Covenants; §6.7 | Post-closing directors' and officers' liability insurance tail coverage for pre-closing acts | 6-year tail; cost not to exceed 300% of current annual D&O premium; buyer to maintain or cause surviving corporation to maintain | 6-year tail; no cost cap; buyer to prepay at closing | Target Mark-Up (Dec 18, 2023) | Resolved | 6-year D&O tail insurance to be obtained by target prior to closing or, if not obtained, buyer to cause surviving corporation to maintain coverage for 6 years; cost not to exceed 300% of current annual premium; coverage to be on terms no less favorable than existing policy; prepaid at or prior to closing | 2024-01-04 | Andrew Fitzpatrick | Medium | Standard market provision; coordinated with Cloudium General Counsel Nadia Chowdhury
[sheet: Summary Dashboard]
Metric | Value
Total Issues Tracked | 40
Resolved | 40
Open | 0
Escalated | 0
High Priority (Total) | 20
High Priority (Resolved) | 20
Medium Priority (Total) | 14
Medium Priority (Resolved) | 14
Low Priority (Total) | 6
Low Priority (Resolved) | 6
Issues Resolved at Initial C&H Turn (Jan 4, 2024) | 16
Issues Resolved at Final Negotiation Session (Jan 15, 2024) | 18
Issues Resolved in Near-Final / Execution (Jan 17–22, 2024) | 6
Matter Number | 1041-00003
Client | Solara Digital Infrastructure LP
Target | Cloudium Technologies plc
Responsible Partner | Harrison Wexford
Lead Associate (Tracker Maintainer) | Tiffany Rosenthal
Working Associate | Andrew Fitzpatrick
Antitrust Specialist | Elaine Forsythe
Tax Specialist | Leonard Cross
Signing Date | January 22, 2024
Last Updated | January 21, 2024
Deal Value | $6,800,000,000
Per-Share Consideration | ~$36.92
Target's Counsel | Ridgeway Phelps & Sato LLP (Catherine Answorth)
[sheet: Draft History]
Version | Date | Circulated By | Circulated To | Description | Key Issues Addressed | Document Reference
V1 — Initial Draft | 2023-12-01 | Calderwood & Harkness LLP (Tiffany Rosenthal) | Ridgeway Phelps & Sato LLP (Catherine Answorth) | Initial draft of Agreement and Plan of Merger among Cloudium Technologies plc, Stratos Merger Sub Inc., and Solara Digital Infrastructure Fund VI LP | All articles; initial positions on MAE, indemnification (10% cap, 10% escrow), termination fee (3.5%), reverse termination fee (4.5%), no-shop, rollover mechanics, regulatory conditions | merger-agreement-initial-draft.docx
V2 — Target Mark-Up | 2023-12-18 | Ridgeway Phelps & Sato LLP (Catherine Answorth / Alistair Fenn) | Calderwood & Harkness LLP (Harrison Wexford / Tiffany Rosenthal) | Target's counsel comprehensive mark-up; 347 comments; significant pushback on MAE carveouts, indemnification cap (proposed 20%), escrow (proposed 5%), go-shop, anti-sandbagging, knowledge definition, employee matters | Issues 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 19, 20, 26, 27, 28, 31, 34, 35, 36, 37, 40 | merger-agreement-target-markup.docx
V3 — Second Revised Draft (C&H) | 2024-01-04 | Calderwood & Harkness LLP (Tiffany Rosenthal) | Ridgeway Phelps & Sato LLP (Catherine Answorth) | C&H comprehensive response incorporating negotiation points; resolved 16 issues; remaining 24 issues flagged for in-person negotiation session | Issues 3, 5, 6, 10, 12, 17, 20, 23, 24, 26, 28, 31, 32, 34, 35, 37, 40 resolved; Issues 1, 2, 4, 7, 8, 9, 11, 13, 14, 15, 16, 18, 19, 21, 22, 25, 27, 29, 30, 33, 36, 38, 39 remain open | merger-agreement-second-revised-draft.docx
Negotiation Session | 2024-01-15 | All parties — in person, New York | C&H / Ridgeway Phelps / Principals | Full-day negotiation session at Calderwood & Harkness LLP, 599 Lexington Avenue, New York; resolved majority of remaining open issues | Issues 1, 2, 4, 7, 8, 9, 11, 13, 14, 16, 18, 22, 25, 29, 36, 38 resolved | N/A
V4 — Third Revised Draft (Near-Final) | 2024-01-17 | Calderwood & Harkness LLP (Tiffany Rosenthal) | Ridgeway Phelps & Sato LLP (Catherine Answorth) | Near-final form reflecting January 15 session agreements; limited bracketed items remain (Issues 15, 19, 21, 27, 30, 39) | Issues 15, 19, 21, 27, 30, 39 resolved in this draft | merger-agreement-third-revised-draft.docx
V5 — Execution Version | 2024-01-22 | Calderwood & Harkness LLP / Ridgeway Phelps & Sato LLP | All parties — execution | Execution version of the Agreement and Plan of Merger; all issues resolved; signed by Cloudium Technologies plc, Stratos Merger Sub Inc., and Solara Digital Infrastructure Fund VI LP | Issue 33 (ticking fee) finalized with lenders; all 40 issues fully resolved | merger-agreement-execution-version.docx